Should Financial Advisors Consider ESG Factors When Advising Their Clients?

Savers and investors rely on their financial advisors to counsel them to prudently invest hard earned savings to meet their long term needs. South Africa has a large advisory and financial planning industry serving the retail public, but is this industry evolving quickly enough to provide advice cognisant of emerging risks? Will advice ignore the effects on investment portfolios of climate change, biodiversity loss and water scarcity, among other Environment, Social and Governance ("ESG") factors? Or will financial advisors and planners become the missing link between sustainable finance products and customers?

With all the noise around ESG investing it can be difficult for customers and their advisors to distil what is relevant. Certainly, ESG investing has become mainstream, being discussed around board rooms and dining room tables. There are a growing number of investors wanting to align their investments with their values by investing in companies that